The EU Faces the Risk of Failing to Finalize a Loan Deal for Ukraine 0 178

The European Union (EU) risks failing to reach an agreement soon on a financing scheme for Ukraine amounting to 175 billion euros using frozen Russian assets. This was reported by the Euractiv portal, citing sources in EU diplomatic circles.

Negotiations on the so-called "reparations loan" will take place at the European Council meeting at the end of October. The initiative is supported by Germany, France, and Eastern EU countries; however, Belgium, where a large portion of Russian assets are frozen, is skeptical about the plan.

According to one diplomat, it is unrealistic to expect an agreement to be reached by the next European Council meeting. Another source from the publication explained that significant legal and technical work will be required to address Belgium's objections. It is noted that the details of the scheme are still being coordinated by the European Commission.

Earlier, Belgium, which holds the majority of the frozen Russian assets, outlined red lines regarding their use for financing a reparations loan to Ukraine amounting to 140 billion euros. These conditions include: a refusal to support any measures that could be interpreted as asset confiscation; the provision of legally binding and strictly enforceable guarantees that European countries will share all current and future risks with Belgium; and an agreement for the immediate return of funds if the Belgian depository Euroclear, where the securities are held, needs to promptly return the assets to Russia.

According to Belgian Prime Minister Bart De Wever, otherwise, the European Commission's scheme amounts to confiscation.